Prison looms over $32M Army Corps bid-rigging scam

Apr. 1, 2013
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This is the Alexandria, Va., home of Kerry Khan, who faces prison for pocketing millions in what prosecutors called the largest-ever bid-rigging scandal involving federal contracts. / Thomas Brown, Federal Times

by Michael Winter, USA TODAY

by Michael Winter, USA TODAY

An Army Corps of Engineers program manager who illegally pocketed millions is facing at least 15 years in prison for what prosecutors called the largest-ever bid-rigging scam involving federal contracts.

Court records show 55-year-old Kerry Khan of Alexandria, Va., and his collaborators collected more than $30 million in kickbacks and bribes over almost five years, The Federal Times writes. He had mistresses in three states and liked expensive cars and liquor.

In May last year, Khan, a federal employee for two decades, pleaded guilty to bribery, bid-rigging and other charges. Sentencing is set for July.

Sentencing guidelines call for a prison term of at least 21 years, but prosecutors will recommend just over 15 because he cooperated after his October 2011 arrest. He must also pay $32.5 million in restitution.

A grand jury indicted Khan and program director Michael Alexander for conspiring with an official at Virginia-based EyakTek, an Alaska Native-owned small business, to funnel more than $45 million in payments to an unnamed EyakTek subcontractor.

Prosecutors said that at the time Khan was arrested that he was planning to rig a contract worth nearly $1 billion.

The Federal Times, published by Gannett, USA TODAY's parent, notes that Khan worked just around the corner from the FBI.

No comment from Khan's attorney, who will seek a prison term of no more than 10 years.